Capital One, U.S Trustee Settle Charges Of Allegedly Screwing Over Consumers Filing Bankruptcy Over Credit Card Debt

The Wall Street Journal reports:

• The U.S. Trustee Program, an arm of the Justice Department that monitors bankruptcy courts, settled with Capital One Financial Corp. on Thursday over allegations that its credit-card unit filed about 5,600 claims on credit-card debts that it wasn't entitled to and improperly received $340,000 from debtors as a result.

• The settlement marks a victory for the U.S. Trustee Program, which in recent years stepped up its investigations into potential wrongdoing by some creditors against debtors in bankruptcy, following complaints from consumer advocates, law professors and judges that debtors weren't being adequately protected. That has been a particularly hot topic amid the current nationwide foreclosure crisis, in which many homeowners have turned to bankruptcy as a way to save their homes.

For more, see Capital One in Settlement Over Card Debt (may require subscription; if no subscription, go here, then click link for the story).

Finance Company Attempts To Collect Payments On A Paid Off Mortgage; Threatens Foreclosure, Damages Homeowner's Credit In The Process

In Saratoga Springs, Utah, KUTV Channel 2 reports:

• How would you like to pay off your mortgage, only to have some unheard of finance company ruin your credit ... And threaten foreclosure?? That's exactly what happened to a Saratoga Springs woman who decided to Get-Gephardt in desperation. The letter from M.G.C. Mortgage says the account is delinquent and they have the right to foreclose on the property...and they've reported it to our nation's credit bureaus!!!

For the rest of the story (video only), see Collections on a Paid Off Mortgage.

Foreclosure Rescue Victims May Have Been Scammed Again By Woman Accused Of Unauthorized Practice Of Law

In Central Florida, the St. Petersburg Times reports:

• [L]ike dozens of other Hispanic residents across Florida, they faced eviction because of their dealings with now-closed mortgage company 4 Solutions of Tampa. And like many of those 4 Solutions customers, they called Barbara Hernandez of Orlando after reading an ad in Spanish newspaper El Nuevo Dia where she offered to help people involved with the company.

• The residents say that she promised they'd get their houses back. That she said she'd lead them in a class-action lawsuit. That for only $50 a month, she'd help them file papers and go to court with them. About 80 families turned to her. The problem? She isn't a lawyer.

***

• Roberto Cruz, an attorney with the [non-profit law firm] Legal Advocacy Center of Central Florida, recently filed the [Florida Bar] complaint against Hernandez alleging unlicensed practice of law. Cruz of Sanford represents several residents hurt in deals worked out by 4 Solutions.

For more, see Victimized homeowners' advocate is not a lawyer.

San Bernardino Deed Theft Suspect Nabbed In Georgia

In San Bernardino County, California, the county district attorney's office recently announced:

• [H]oward Jerome Edwards was arrested by the Henry County Police Department at his residence in Locust Grove, Georgia. Edwards was arrested on the outstanding felony warrant that included charges of forgery, identity theft, and filing forged documents with the San Bernardino County Recorder’s Office.

According to the DA's office press release, Edwards and co-defendant John Foster, 50, of Riverside, forged the victim's signature on a Grant Deed and Deeds of Trust for property located in Fontana. Subsequently, Edwards and Foster sold the Fontana residence for $675,000.

Source: Man Arrested in Georgia on Real Estate Fraud Charges.

Con Man Gets 5+ Years For Victimizing Widow, Pocketing $2M In Refinance Scam

In San Francisco, California, The Recorder reports:

• Michael Edison, a con man who stole $2 million from the widow of a legendary law firm founder, has agreed to spend more than five years in jail. [...] Michael Edison admitted targeting Jean Phleger, widow of Brobeck, Phleger & Harrison founder Atherton Phleger, in a financial swindle. Originally introduced to Phleger by her son-in-law, the actor Don Johnson, Edison agreed to refinance Phleger's house, pay down her old mortgage, and use $2 million in leftover cash to pay Phleger's bills. But Edison instead used the money for a private jet, a boat docked in Malta, cars, and goods at Kmart, Foot Locker and other stores, according to court filings.

For more, see Con Man's Plea May Spare His Wife.

For earlier story announcing the indictment, see the San Francisco Chronicle: Man indicted in $2 million fraud.

Texas Man Faces Theft From Elderly Charge; Allegedly Conned Dementia-Suffering Widow Into Signing Away Deed To Home For Less Than 15% Of Value

In Houston, Texas, FOX 26 reports:

• Joseph Kelly Lecureux, 39, is charged with theft from the elderly; authorities are accusing him of trying to take advantage of an elderly widow whose home was on the verge of foreclosure. [...] According to Marian Rosen, [the homeowner's] attorney, the elderly widow was suffering from dementia when she signed the deed to her home over to Lecureux, selling it for less than 15 percent of it's value.

According to the FOX 26 video coverage, the widow's attorney filed a successful civil suit voiding the deed and restoring title to the home in the name of the widow. Sometime thereafter, local law enforcement authorities filed the criminal charges against Lecureux.

For more, see Man Faces Theft From Senior Charge (read story) (watch FOX 26 video report).

Go here, go here, and go here for other posts related to deed theft by forgery, swindle, etc.

Go here, here, here, here, here, and here for other posts on elder financial abuse. FinancialAbuseOfElderlyAlpha deed theft xenon

NJ Homeowners Claim Fraud In Sale Leaseback, Foreclosure Rescue Lawsuit; Pattern Of Activity Should Qualify As Racketeering, Says Attorney

In Central New Jersey, the Asbury Park Press reports:

• [Little Egg Harbor resident Michael] Moreno says he was stripped of nearly $70,000 in equity in the February 2006 [sale leaseback, foreclosure rescue] deal, and he faces eviction from the house he thought he saved. He also is one of two former homeowners suing [Robert] Heath and related companies in an attempt to undo deals they claim are fraudulent.(1) Their attorney, Kevin Carlin of Hamilton, said the documents on the deals list transactions that never happened, a violation of federal law. Carlin also said there are more than 40 similar real estate transactions involving Heath in the state. In the lawsuit, Carlin argues "the pattern" of activity should qualify as racketeering.

***

• Deborah and Lawrence Mayo of Brick also have joined the lawsuit against Heath, and they also claim there was a fraudulent transaction. Carlin said at least three other families have contacted him about allegedly bad deals with Heath's businesses. Two of those families already were evicted from their homes, Carlin said.

***

• "On paper it looks like a typical real estate transaction with a purchase and a sale, but when you look behind the paper — which is what courts of equity will do — what you see is that the transaction was actually the granting of an equitable mortgage; they were really just refinancing the property," Carlin said. "And they accomplished it by using an attorney who gave the appearance of a disinterested party while she was the wife of the principal [Heath]."

For more, see Eviction looming, man sues over deal (He, others say they feel cheated).

(1) According to the story, Heath's Marlboro-based company, MGT Group, would offer to sell the home back to Moreno at a later date.

71 New Charges Filed Against San Diego Suspects In Alleged "Land Grant" Foreclosure Rescue Scam

In San Diego, California, KGTV Channel 10 reports:

• Five people accused of victimizing hundreds of San Diego County homeowners in a home foreclosure rescue scam were arraigned Friday on 71 new charges, including conspiracy and grand theft. Alleged ringleader William Hutchings, 62, his wife Xiaoke Li, 45, and Shawna Landis, 36, along with Diego Gil and Edgar Martinez, now face a total of 172 charges, including felony civil code violations alleging rent and foreclosure fraud, said Deputy District Attorney Stephen Robinson. The additional charges reflect counts against new victims and so-called "rent skimming," the prosecutor said.

***

• At a hearing in May, Robinson said the defendants allegedly offered to help homeowners keep their property by placing them in "land grants," when in fact the transactions were bogus and left the victims even worse off than they were before.

• Two methods were used to get owners of residences in foreclosure to participate in the so-called land grant program, Robinson said. One method required homeowners to pay a one-time fee of up to $10,000 to put their property in a land grant. The second method was a lease-back scheme in which homeowners transferred their property to the defendants and then paid rent to stay in their homes. In both scenarios, homeowners were eventually foreclosed on anyway and evicted and retained no legally recognized title to the property. In addition to losing their homes, the victims were swindled out of hundreds of thousands of dollars, authorities said.

Source: New Charges Filed In County Foreclosure Scam.

Another Upfront Fee Foreclosure Rescue Operator Faces The Heat As Ohio AG Files Civil Suit Alleging Violations Of Multiple State Laws

In Wood County, Ohio, WNWO-TV Channel 24 reports:

• In a continuing effort to fight consumer fraud fueled by the mortgage foreclosure crisis, the Ohio Attorney General filed a lawsuit Monday to stop a mortgage rescue scam from victimizing consumers in Auglaize, Hancock and Wood counties.

• The action alleges that Dwelling Assurance, Inc., and its owner, Nancy Schmidt of Lima, violated Ohio’s consumer protection laws by engaging in unfair and deceptive practices. The complaint alleges violations of the Ohio Consumer Sales Practices Act, the Credit Services Organization Act, the Debt Adjusters Act, and the Home Solicitation Sales Act [sections 1345.21 to 1345.28 of the Ohio Revised Code].

• The lawsuit is based on consumers who complained that Schmidt and Dwelling Assurance led them to believe that they could help save their homes. Instead, the complaint alleges the defendants took the homeowners’ money up front, without performing any services to stop the foreclosures.

For more, see Attorney General sues mortgage rescue company.

To view the lawsuit, see State of Ohio v. Schmidt.

Washington State AG Settles Civil Charges With Florida Foreclosure Rescue Operator

The Office of the Washington State Attorney General announced earlier this week:

• [T]he Attorney General’s Office accused United Home Savers, LLP, of Clearwater, Fla., and owners Stephanie and Darin Dietschy, of Belleair Beach, Fla., of violating Washington’s Consumer Protection Act, Credit Services Organization Act and Commercial Telephone Solicitation Act.

• The company is now out of business. Owners did not admit any liability, but agreed to a consent decree that prohibits them from engaging in alleged violations in the future. According to the state’s civil complaint and the settlement, filed [Wednesday] in Spokane County Superior Court, United Home Savers advertised to Washington homeowners that the company can rescue homeowners from foreclosure. The company charged $1,200 or more up front and promised a refund if their services weren’t successful.

• But Assistant Attorney General Jack Zurlini said the majority of homeowners received little or no help, and the company routinely refused or failed to refund money. [...] United Home Savers is also under fire from the Federal Trade Commission in a lawsuit filed in U.S. District Court for the Middle District of Florida.

For more, see Attorney General says United Home Savers is a misnomer (Florida company accused of charging homeowners for empty promises).

Florida AG Files Civil Suit Against Foreclosure Rescue Firm Promising To Find Errors In Homeowners' Loan Docs, Then Fight Lenders

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

• Fort Lauderdale-based Outreach Housing calls itself a grass-roots organization with "a groundbreaking initiative" to help South Florida homeowners threatened with foreclosure. But the Florida Attorney General's Office said Thursday that behind that promise of mortgage relief is a company engaged in deceptive practices that have left a trail of at least 50 complaining homeowners.

• The state filed a consumer protection lawsuit against Outreach Housing, asking a Broward Circuit Court judge to issue an injunction preventing it from engaging in any aspect of the real estate business. Also named as defendants in the suit are Blair L. Wright and Bryan Berry, the two men the state says own the company.

• Outreach Housing promises to help imperiled homeowners by finding inaccuracies in lending documents and then fighting mortgage companies to prevent foreclosure and obtain financial restitution, according to its Web site.

• The Attorney General's Office said Outreach Housing instructed clients to stop paying their mortgages and instead pay the company about 60 percent of what their monthly mortgage payment would be. Customers complained that Outreach Housing took their money, but they didn't receive any relief in return, the Attorney General's Office said.

• In addition, the company engaged in the unauthorized practice of law, according to the lawsuit filed Monday.

For more, see Lauderdale firm didn't deliver mortgage relief, state suit alleges (Lauderdale company denies wrongdoing and says it was let down by law firms it trusted to help individuals).

For the Florida attorney general's press release, see Broward Foreclosure Debt Mitigation Company Sued for Deceptive Practices (Their investigation revealed that more than 600 homeowners had signed up for the company’s services).

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According to their website, "Outreach Housing has dedicated sufficient resources to provide relief for $1.2 Billion in residential properties. Through the efforts of Outreach Housing, a dedicated network of professionals will pursue restitution for thousands of homeowners faced with foreclosure by outlining the TILA and RESPA violations that occurred at the lenders level—bottom-line this effort will allow the homeowner to stay in their home." UndoMortgageLoans TILAdelta

Tampa Feds Obtain Another Indictment Alleging An Equity Stripping, Foreclosure Rescue Scam; Extradition May Be Necessary For Fugitive-Suspects

In Tampa, Florida, The Bradenton Herald reports:

• The operators of an alleged foreclosure-rescue scam that was active in Manatee County are facing federal criminal charges. A federal grand jury in Tampa last week indicted Jose Oliveri and Mario Quiroz each on 22 counts of conspiracy, wire and mail fraud, and money laundering, court records show.

• The Tampa-area men were principals in 4 Solutions Inc., a Tampa company that promised to help distressed homeowners avoid foreclosure. Instead, they sold the homes to third parties, fraudulently obtained excessive mortgages and let the homes fall into foreclosure anyway, prosecutors said.

• The alleged scheme netted more than $22.5 million, according to the indictment. Quiroz, also known as Juan Mario Quiroz del Valle and Juan Mario Quiroz del Valle Buch and Oliveri, also known as Jose Alberto Oliveri-Agurto, have not been arrested. They are considered fugitives, said Steve Cole, a spokesman for the U.S. Attorney’s Office in Tampa. “It’s likely they are in Peru and we will have to extradite them if they are,” he said Tuesday.

For more, see Charges pending in alleged scam.

For the indictment, see USA v. Quiroz, Oliveri.

Go here for earlier reports (and any available updates) on 4 Solutions.

For more on an earlier successful equity stripping, foreclosure rescue scam prosecution by the Tampa Feds, see:

• U.S. Attorney Press Release (3-29-07) - Tampa Federal Jury Convicts five Persons In Home Equity/Bank Fraud Scheme,
• For the grand jury indictment, see U.S. vs. Moumneh, et al.

Go here for other criminal prosecutions of foreclosure rescue operators.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Brooklyn Court Refuses To Dismiss Suit Alleging Fraud In Foreclosure Rescue Transaction

In Brooklyn, New York, a lawsuit in which a homeowner claims that he was scammed out of ownership of his former home, and in which he seeks reconveyance of the premises to him has been allowed to continue. In refusing to dismiss the complaint, Brooklyn Supreme Court Justice Arthur Schack ruled that there were triable issues of fact as to whether their the homeowner was fraudulently induced into conveying the premises to the defendant.

For the court's ruling, and the case law cited therein, see Bryan v Lindsay, 2008 NY Slip Op 51781(U); Decided on August 27, 2008.